2015 (10) TMI 2516 - AT - Central Excise

Cenvat credit availed on inputs utilised in the fabrication of tools and dies denied - Held that - It is an admitted fact that the appellant have utilised the inputs in question falling under Chapter 72 of the CET Act in the fabrication of tools and dies which have been further utilised in the main factory for manufacture of goods which have been cleared on payment of duty. Further as find that moulds and dies, have been defined as capital goods in Rule 2(A)(iv) of the Cenvat Credit Rules, 2004. Accordingly, allow the appeal with consequential benefits if any.

Summary

Issues:
- Denial of Cenvat credit on inputs utilized in the fabrication of tools and dies
- Extended period of limitation invoked by the Revenue
- Interpretation of the definition of capital goods under the Cenvat Credit Rules

Analysis:
1. The appellant, a manufacturer of motor vehicle components, appealed against the denial of Cenvat credit on inputs used in fabricating tools and dies. The dispute arose from a show cause notice issued based on an audit, alleging improper availing of credit on capital goods under Chapter 72 for making tools/dies. The Revenue invoked an extended period from 2008-09 to May 2012, seeking recovery of credit amounting to Rs. 1,94,134 along with interest and penalties.

2. The appellant contested the notice, arguing regular disclosure of credit availed and proper use of inputs in manufacturing tools/dies within the factory for final products. Despite the appellant's contentions, the order-in-original disallowed the credit, imposed penalties, and the Commissioner (Appeals) upheld the decision citing lack of specific disclosure regarding input utilization for capital goods fabrication.

3. The appellant approached the Tribunal, emphasizing that the inputs were indeed used for tools/dies, which qualify as capital goods under Rule 2(A)(iv) of the Cenvat Credit Rules. The appellant criticized the Commissioner's failure to grasp the capital goods definition, seeking relief through the appeal.

4. The Revenue defended the original decision, highlighting inadequate disclosure to justify the extended period invocation. However, upon review, the Tribunal acknowledged the input utilization for tools/dies under Chapter 72 and recognized tools and dies as capital goods per the Cenvat Credit Rules. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and granting any consequential benefits to the appellant.